Paradis Honey Ltd. v. Canada

Paradis Honey Ltd. v. Canada
Court (s) Database
Federal Court of Appeal Decisions
Date
2015-04-08
Neutral citation
2015 FCA 89
File numbers
A-169-14
Notes
A correction was made on January 20, 2015
Reported Decision
Decision Content
Date: 20150408
Docket: A-169-14
Citation: 2015 FCA 89
CORAM:
NADON J.A.
PELLETIER J.A.
STRATAS J.A.
BETWEEN:
PARADIS HONEY LTD., HONEYBEE ENTERPRISES LTD. AND ROCKLAKE APIARIES LTD.
Appellants
and
HER MAJESTY THE QUEEN, THE MINISTER OF AGRICULTURE AND AGRI-FOOD AND THE CANADIAN FOOD INSPECTION AGENCY
Respondents
Heard at Edmonton, Alberta, on November 3, 2014.
Judgment delivered at Ottawa, Ontario, on April 8, 2015.
REASONS FOR JUDGMENT BY:
STRATAS J.A.
CONCURRED IN BY:
NADON J.A.
DISSENTING REASONS BY:
PELLETIER J.A.
Date: 20150408
Docket: A-169-14
Citation: 2015 FCA 89
CORAM:
NADON J.A.
PELLETIER J.A.
STRATAS J.A.
BETWEEN:
PARADIS HONEY LTD., HONEYBEE ENTERPRISES LTD. AND ROCKLAKE APIARIES LTD.
Appellants
and
HER MAJESTY THE QUEEN, THE MINISTER OF AGRICULTURE AND AGRI-FOOD AND THE CANADIAN FOOD INSPECTION AGENCY
Respondents
REASONS FOR JUDGMENT
PELLETIER J.A. (Dissenting Reasons)
I. INTRODUCTION [1] This appeal arises from a proposed class action by a group of commercial beekeepers (the Beekeepers), who rely on the importation of honeybees to replace colonies lost due to winter-kill and other factors. The subject matter of the litigation is the ban on importation of honey bees from the United States which has been in force in one form or another since the 1980s. The Beekeepers’ complaint is that since 2007, the respondents have adopted a policy of blanket prohibition on the importation of bee “packages”, a term which will be explained below. While many of the Beekeepers allegations would, if proved, give them an administrative law remedy, they have sued in negligence, alleging that the respondents owe them a duty of care, have breached the associated standard of care and have caused them damage.
[2] Counsel for the respondents, Her Majesty the Queen, the Minister of Agriculture and Agri-food (the Minister) and the Canadian Food Inspection Agency (the Agency) (collectively the respondents) moved to have the Beekeepers’ action struck out as disclosing no reasonable cause of action. That motion was granted and the action was dismissed with costs, with reasons reported as Paradis Honey Ltd. v. Canada (Attorney General), 2014 FC 215 (Reasons).
[3] For the reasons that follow, I would allow the appeal in part, and set aside the Federal Court Judge’s order as to costs. I would confirm the dismissal of the Beekeepers’ statement of claim.
II. THE FACTUAL MATRIX [4] Canada’s winter climate being what it is, beekeepers have always suffered losses of colonies over the winter, losses which have to be made up by the importation of new bees. According to the Beekeepers, this can take one of two forms: either as a “package”, a cereal-box-sized container holding a small colony (including a queen) or as a “queen”, a match-box-sized container holding a queen bee and a few attendant bees. Not surprisingly, it appears that, it is more efficient to replace an existing colony with another (i.e. a package). Replacing a colony with a queen requires more inputs and carries more risk on the way to establishing a productive colony.
[5] The Health of Animals Act, S.C. 1990, c. 21 (the Act) and its predecessor legislation have, at all material times, governed the importation of animals, including bees, into Canada. Section 14 of the Act provides as follows:
14. The Minister may make regulations prohibiting the importation of any animal or other thing into Canada, any part of Canada or any Canadian port, either generally or from any place named in the regulations, for such period as the Minister considers necessary for the purpose of preventing a disease or toxic substance from being introduced into or spread within Canada.
14. Le ministre peut, par règlement, interdire l’importation d’animaux ou de choses soit sur tout ou partie du territoire canadien, soit à certains points d’entrée seulement; l’interdiction, qui peut être générale ou viser uniquement des provenances précises, est en vigueur le temps qu’il juge nécessaire pour prévenir l’introduction ou la propagation au Canada d’une maladie ou d’une substance toxique.
[6] In the absence of specific regulations, importation of animals is managed by way of ministerial permits issued under section 160 of the Health of Animals Regulations, C.R.C. 296 (the Regulations):
160. (1) Any application for a permit or licence required under these Regulations shall be in a form approved by the Minister.
160. (1) La demande d’un permis ou d’une licence qu’exige le présent règlement est présentée selon une formule approuvée par le ministre.
(1.1) The Minister may, subject to paragraph 37(1)(b) of the Canadian Environmental Assessment Act, issue a permit or licence required under these Regulations where the Minister is satisfied that, to the best of the Minister’s knowledge and belief, the activity for which the permit or licence is issued would not, or would not be likely to, result in the introduction into Canada, or spread within Canada, of a vector, disease or toxic substance.
(1.1) Le ministre peut, sous réserve de l’alinéa 37(1)b) de la Loi canadienne sur l’évaluation environnementale, délivrer tout permis ou licence exigé par le présent règlement s’il est d’avis que l’activité visée par le permis ou la licence n’entraînera pas ou qu’il est peu probable qu’elle entraîne, autant qu’il sache, l’introduction ou la propagation au Canada de vecteurs, de maladies ou de substances toxiques.
[7] Between the late 1980s and December 31, 2006, the Minister made a series of regulations prohibiting the importation of honeybees into Canada from the continental United States for various periods of time. The prohibitions were designed to prevent the spread into Canada of the tracheal mite bee pest which, according to the Regulatory Impact Analysis Statements (RIASs) issued concurrently with the regulations, threatened disastrous effects on Canada’s beekeeping industry.
[8] The last such regulation was the Honeybee Importation Prohibition Regulations, 2004, SOR/2004-136 (HIPR 2004). Subsection 1(1) of the HIPR 2004 continued the prohibition on the importation of honeybees into Canada from the continental United States, as of the coming into force of the regulation until December 31, 2006. Subsection 1(2) provided that the prohibition in subsection 1(1) did not apply to the importation of a honeybee queen with its attendant bees from the United States pursuant to a permit issued under section 160 of the Regulations. The result was that the prohibition on importation of “packages” was continued until the end of 2006, while the importation of “queens” was allowed pursuant to permits issued under the authority of section 160 of the Regulations.
[9] The kernel of the litigation underlying this appeal is the fact that once the HIPR 2004 expired at the end of 2006, it was not replaced. The importation of “queens” continued to be allowed pursuant to permits issued under section 160 of the Regulations but, instead of promulgating a new regulation dealing with the importation of “packages”, the Minister simply adopted a policy that no permits would be issued for the importation of “packages”. The Statement of Claim alleges that this policy was communicated to the industry and, in the words of the statement of claim, “constitutes a de facto ministerial order or directive for which there is no lawful authority”: see Appeal Book (A.B.) at page 63.
[10] The Beekeepers plead that the purpose of the original restrictions on importation was to protect and promote the economic interests of the Canadian bee industry and Canadian beekeepers by insulating them from the risk of disease associated with the importation of bees from the United States. They say that the respondents owed them a duty of care with respect to the importation of bees from the United States, a duty which arose from the statutory scheme itself and from various interactions between the respondents and representatives of the beekeeping industry, as particularized at paragraph 26 of both the statement of claim and the proposed amended statement of claim. In summary, this duty of care arose from:
− The statutory scheme itself,
− The respondents’ representations to the beekeeping industry that they were acting in the industry’s interest,
− The respondents’ knowledge of the hardship to certain beekeepers and beekeeping region resulting from the prohibition on importation of bees from the United States,
− The respondents’ consultation and cooperation with the beekeeping industry on bee import policy.
[11] The statement of claim particularizes the content of the respondents’ duty of care (i.e. the standard of care) and sets out the ways in which standard of care was breached. The members of the proposed class allege that they have suffered loss and damage as a result of the respondents’ negligence and seek damages in the amount of $200,000,000. See the A.B. at pp. 59-67.
[12] A Federal Court Judge (sometimes referred to simply as the Judge) was appointed to manage the Beekeepers proposed class action. The Beekeepers’ motion for certification was served and filed on or about September 12, 2013. In November 2013, the respondents served and filed their motion to strike out the Beekeepers’ action. The Notice of Motion alleged that the Beekeepers were not in such a close and direct relationship of proximity with the respondents so as to give rise to a private duty of care.
[13] In response, the Beekeepers filed a motion record including a memorandum of fact and law to which they attached a proposed amended statement of claim, in order to illustrate that any lack of particularity alleged by the respondents could be remedied by amendment. When the respondents took the position that it was too late for the Beekeepers to amend their claim, the latter wrote to the case management judge to make clear that they were not seeking to amend their claim, indicating that “the Proposed Amended Statement of Claim was provided for illustrative purposes and that there is no motion before the Court at this time to amend the Statement of Claim.”: A.B. at p. 210.
III. THE DECISION UNDER APPEAL [14] After setting out in considerable detail the parties’ arguments, the Judge set out the test on a motion to strike out a statement of claim for failing to disclose a cause of action. He noted that the Court should take the facts pleaded as true, unless they are manifestly incapable of being proven, and should strike out a statement of claim only if it is plain and obvious that those facts disclose no cause of action.
[15] The Judge then turned to the proposed amended statement of claim. Relying on Rule 75 of the Federal Courts Rules, SOR/98-106, the Judge held that the Beekeepers could not amend their statement of claim without leave. Furthermore, since the matter was case-managed, it was incumbent on the Beekeepers to advise the Court of their intention to amend their pleadings.
[16] The Judge found that the facts pleaded in the amended statement of claim were well known to the Beekeepers prior to the case management conference at which the date for the hearing of the respondents’ motion to strike was fixed. Having reviewed the amendments, the Judge was not satisfied that they cured the deficiency with respect to the issue of proximity between the Beekeepers and the respondents. Relying on Apotex Inc. v. Bristol-Myers Squibb Company, 2011 FCA 34, the Judge held that the Beekeepers should have been more forthright about their intention to amend their claim. In the result, the Judge struck the amended paragraphs of the Beekeepers statement of claim as well as any other paragraph which referred to the proposed amendments.
[17] The Judge then considered whether it was plain and obvious that the Beekeepers’ claim of negligence based on lack of lawful authority would fail. The Judge found that the Act and the Regulations provided the Minister with express authority to make decisions about the importation of regulated animals, including honeybees, into Canada. He found that the facts pleaded by the Beekeepers could not establish liability since it is settled law that a breach of statutory duty is not, in and of itself, negligence: Holland v. Saskatchewan, 2008 SCC 42, [2008] 2 S.C.R. 551 at paragraph 9.
[18] The Judge then turned to the test for the existence of a duty of care as set out in Anns v. Merton London Borough Council, [1978] A.C. 728 (H.L.) (Anns). He noted the parties’ agreement that the starting point in the analysis is to determine whether a duty of care has been recognized in similar cases. After reviewing the case law put before him by the parties, the Judge concluded that there was no case which established a private law duty of care in similar circumstances.
[19] The Judge then proceeded to apply the first leg of the Anns test, namely, whether the facts pleaded “revealed the existence of a relationship that is sufficiently close to create a duty on the [respondents] to take reasonable measures to protect the [Beekeepers] from foreseeable economic losses”: Reasons at paragraph 95.
[20] The question was therefore whether there was sufficient proximity between the Beekeepers and the respondents to give rise to a duty of care. The Judge noted that the Beekeepers based their allegation of a duty of care on the statutory scheme itself, as well as on the nature of the interaction between the respondents and the beekeeping industry.
[21] After reviewing specific provisions of the Act and the Regulations, the Judge agreed with the respondents’ position that the legislative scheme is “aimed primarily at entrusting the [Agency] with broad regulatory authority to protect animal health for the public good…”: Reasons at paragraph 102-103. This broad purpose excludes any private duty of care to protect the economic interests of those who rely on imported animals in their commercial activity.
[22] The Judge rejected the Beekeepers contention that the statutory purpose could be found in the RIASs which accompanied the issuance of the regulations over the years. While acknowledging that these statements had been accepted as an aid in construing the regulations with which they were associated, the Judge rejected the notion that they “established the intent and purpose of the governing statute”: Reasons at paragraph 107.
[23] The Judge concluded his analysis on this leg of the Anns test by quoting from the Supreme Court’s decision in R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42, [2011] 3 S.C.R. 45 (Imperial Tobacco) at paragraph 50, to the effect that he failed to see how “it could be possible to convert any of the Minister’s public law discretionary powers, to be exercised in the general public interest, into private law duties owed to specific individuals”: Reasons at paragraph 109. As a result, the Judge rejected the claim of proximity based on the statutory scheme.
[24] I am in full agreement with the Judge’s analysis on this leg of the test and propose to say no more about it.
[25] The Judge then examined the question of whether the course of conduct between the respondents and the beekeeping industry could give rise to sufficient proximity to support a prima facie duty of care. He noted the absence of a statutory obligation to consult the industry which led him to comment that the fact that consultations took place did not alter the purpose of the Act.
[26] The Judge noted the Beekeepers’ argument that the RIASs, particularly the one issued in conjunction with the HIPR 2004, discussed “costs and measures to alleviate the impact [of the import ban] on the industry and that concerns related to the public at large were barely mentioned”: Reasons at paragraph 111. On the other hand, the Judge underlined that the Beekeepers’ allegations of interaction with the industry were based on consultations surrounding the need to prolong the ban on importation and were very general. In particular, the Judge noted that the Beekeepers did not plead that they had applied for and were refused a permit for the importation of packages. He concluded that the Beekeepers pleadings did not establish a sufficient degree of proximity arising from their interaction with the respondents to give rise to a duty of care.
[27] By way of abundant caution, the Judge continued his analysis and considered the second leg of the Anns test, namely whether there were any overriding policy considerations which would negate any prima facie duty of care found to exist under the first leg of the test.
[28] The Judge agreed with the respondents’ contention that the finding of a duty of care would expose them to indeterminate liability. Given that the Beekeepers are but one of many participants in the agricultural sector, a finding of a duty of care would open the door to claims by the other participants in that sector, putting the respondents in an untenable position, that of indeterminate liability, particularly in a case such as this where the claim was for pure economic loss.
[29] The Judge went on to characterize the Minister’s decision to refuse import permits as a true policy decision, relying on dicta from Imperial Tobacco, cited above. He found that the ban on the importation of packages represented “a course of action based on a balancing of public policy considerations, such as social and economic considerations”: Reasons at paragraph 118.
[30] These two intermediate conclusions supported the Judge’s ultimate conclusion that there were policy reasons which would negate any prima facie duty of care, had one been found to exist under the first leg of the Anns test.
[31] The Judge considered the Beekeepers’ allegations that the Minister had improperly delegated his discretion to a third party, which he rejected as deficient, since it was not pleaded that someone other than the Minister adopted the policy in question.
[32] The Judge also rejected the Beekeepers’ allegations of improper relationships between the respondents and the Canadian Honey Council.
[33] In the end result, the Judge concluded that, even when the Beekeepers’ proposed amendments were considered, no reasonable cause of action was made out.
[34] On the issue of costs, the Judge relied on the authority of Pearson v. Canada, 2008 FC 1367, and found that since the action had not yet been certified as a class action, Rule 334.39 did not apply. Rule 334.39 precludes the making of an order for costs against “any party to a motion for certification of a proceeding as a class proceeding” with certain exceptions, none of which are relevant to these proceedings.
IV. ISSUES [35] The issues raised by this appeal are the following:
1. What is the standard of review for our review of the Judge’s decision?
2. Is it plain and obvious that the Beekeeper’s claim in negligence is bound to fail?
3. Assuming that they are successful, are the respondents entitled to costs?
V. THE STANDARD OF REVIEW [36] The parties are agreed that a judge’s decision to strike a claim is discretionary; it should not be disturbed in the absence of an error of law, a misapprehension as to the facts, a failure to give appropriate weight to all relevant factors or an obvious injustice: Bauer Hockey Corp. v. Sport Maska Inc., 2014 FCA 158 at paragraph 12; Apotex Inc. v. Canada (Governor in Council), 2007 FCA 374 at paragraph 15. However, even where the judge has erred in the exercise of discretion, the appellants are not entitled to succeed unless they are able to show that a proper exercise of that discretion would lead to a different result.
[37] The test for striking out a statement of claim for failing to disclose a reasonable cause of action is whether it is “plain and obvious” that the claim must fail. A claim must not be struck simply because it is complex, or because the plaintiff puts forward a novel cause of action:
[a]ssuming that the facts as stated in the statement of claim can be proved, is it "plain and obvious" that the plaintiff's statement of claim discloses no reasonable cause of action? As in England, if there is a chance that the plaintiff might succeed, then the plaintiff should not be "driven from the judgment seat". Neither the length and complexity of the issues, the novelty of the cause of action, nor the potential for the defendant to present a strong defence should prevent the plaintiff from proceeding with his or her case.
Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959 at page 980
[38] Since the Judge correctly identified the test, the question before this Court is whether he applied it properly.
VI. IS IT PLAIN AND OBVIOUS THAT THE BEEKEEPERS’ CLAIM IN NEGLIGENCE IS BOUND TO FAIL? [39] Having regard to my colleague’s comments in his reasons as to the construction of pleadings, it is perhaps appropriate to summarize the Beekeepers’ pleadings, if only to put my reasons in context. After setting out the relevant facts in paragraphs 2 to 23, the Beekeepers plead, at paragraph 24, that they rely upon the Crown Liability and Proceedings Act, R.S.C. 1985, c. C-50, which provides for the liability of the Crown in tort in the common law provinces
[40] In paragraph 25, the Beekeepers identify the stated purpose of the legislation, including the Regulations. Paragraph 26 begins “The Defendants owed a duty of care to the Plaintiffs…”. This is followed by subparagraphs a) to f) which set out the facts from which this duty of care arose. The proposed amendments to the Beekeepers statement of claim set out 16 new paragraphs containing further particulars as to the basis of the duty of care.
[41] Paragraph 27 of the statement of claim itemizes the elements of the duty of care which I take to be a statement of the standard of care the respondents owed to the Beekeepers. Subparagraphs a) to j) set out the particulars of the standard of care.
[42] Paragraph 28 of the statement of claim then alleges that the respondents breached their duty of care by doing the various acts which are itemized in subparagraphs a) to j). In paragraph 29, the Beekeepers plead that the respondents knew or ought to have known that their negligence “and the improper continuation of the Prohibition [on importation]” would cause them loss and damage.
[43] Paragraph 30 sets out the particulars of the loss and damage suffered by the Beekeepers.
[44] In the introductory paragraphs of the statement of claim, the Beekeepers pleaded that they claimed damages as a result of the respondents “acting without lawful authority” in prohibiting the importation of honeybee packages after the expiry of HIPR 2004. In their proposed amendments to the statement of claim, the Beekeepers abandoned their claim for damages based on the respondents’ lack of lawful authority.
[45] The Beekeepers chose to sue the respondents in negligence. The fact that the pleadings allege facts which, if proved, would give rise to administrative law remedies does not, in and of itself, establish negligence: Holland, cited above, at paragraph 9. The Beekeepers appear to have recognized this when they proposed to delete from their statement of claim the head of damages arising from the respondents’ lack of lawful authority to do what they did.
[46] In my view, despite the various administrative law issues which the facts pleaded by the Beekeepers raise, this appeal is solely concerned with whether or not their pleadings disclose a reasonable cause of action in negligence.
[47] As noted above, the law on the liability of public authorities in negligence is determined by the test in Anns v. Merton London Borough Council, [1978] A.C. 728 (Anns), adopted by the Supreme Court of Canada in Kamloops (City of) v. Nielsen, [1984] 2 S.C.R. 2, and explained in Cooper v. Hobart, 2001 SCC 79, [2001] 3 S.C.R. 537. This law was most recently canvassed in Imperial Tobacco, cited above.
[48] The Anns test is a two part test: (1) do the facts disclose a prima facie duty of care, that is, a relationship of proximity which makes it just and reasonable to impose an obligation to take reasonable care to prevent foreseeable harm; and (2) are there policy reasons why this prima facie duty of care should not be recognized.
[49] I would point out that there are two formulations in the jurisprudence, indeed within Imperial Tobacco itself, as to the first leg of the Anns test. At paragraph 39 of Imperial Tobacco, the Supreme Court frames the test as “whether the facts disclose a relationship of sufficient proximity in which failure to take reasonable care might foreseeably cause cause harm or loss to the plaintiff.” Further on, at paragraph 41, the Court says:
Foreseeability must be grounded in a relationship of sufficient closeness, or proximity, to make it just and reasonable to impose an obligation on one party to take reasonable care not to injure the other.
[50] The reference to “just and reasonable” underlines that there is a policy element in the first leg of the test, a fact which the Court recognized in Cooper v. Hobart:
In brief compass, we suggest that at this stage in the evolution of the law, both in Canada and abroad, the Anns analysis is best understood as follows. At [page551] the first stage of the Anns test, two questions arise: (1) was the harm that occurred the reasonably foreseeable consequence of the defendant's act? and (2) are there reasons, notwithstanding the proximity between the parties established in the first part of this test, that tort liability should not be recognized here? The proximity analysis involved at the first stage of the Anns test focuses on factors arising from the relationship between the plaintiff and the defendant. These factors include questions of policy, in the broad sense of that word. If foreseeability and proximity are established at the first stage, a prima facie duty of care arises.
Cooper v. Hobart at paragraph 30
[51] The point of this observation is to underline that proximity cannot simply be treated as an aspect of foreseeability in the sense that it addresses the question: was the defendant so situated relative to the plaintiff that it was foreseeable that the latter might be harmed by the former’s conduct? Proximity is to be seen as a limitation on foreseeability. As the Supreme Court pointed out in Imperial Tobacco, at paragraph 41, “[n]ot every foreseeable outcome will attract a commensurate duty of care.” The proximity requirement seeks to identify within the universe of all relationships in which the acts of one party might injure another, those relationships in which it is just and reasonable to impose a duty of care to avoid that foreseeable harm.
[52] My conclusion is that the articulation of the proximity found at paragraph 41 of Imperial Tobacco is a fuller expression of the test than is the articulation found in paragraph 39, which I take to be a shorthand expression of the test.
[53] The question in this case is whether there was a sufficient degree of proximity between the Beekeepers and the respondents to give rise to a duty of care. Proximity may arise from the statutory scheme itself or it may arise from the interactions between the parties. I have already indicated that I see no error in the Judge’s conclusion that there is no relationship of proximity, and no corresponding prima facie duty of care, arising from the statutory scheme.
[54] These reasons deal with the issue of proximity arising from the course of conduct between the parties. In addressing that question, we may look at “expectations, representations, reliance, and the property or other interests involved”; there is no single unifying characteristic: Cooper v. Hobart at paragraphs 34-35.
[55] This case is similar to Imperial Tobacco in that it involves the decisions of a regulatory authority. It is different in the sense that the Beekeepers are not, per se, the regulated entity. They are one group, among others, who may be affected by the regulators’ decisions. Other affected groups include agricultural producers who rely upon pollination of their crops by honeybees, as well as processors who use those agricultural products as an input for their products. That said, the difference is admittedly one of degree and not one of kind.
[56] The conduct which gave rise to a relationship of proximity in Imperial Tobacco was Canada’s departure from its role as regulator and its assumption of that of “designer, developer, promoter and licensor of tobacco strains”: see Imperial Tobacco at paragraph 54.
[57] What facts have the Beekeepers pleaded which could give rise to a relationship of proximity with the respondents? The statement of claim recites the history of the ban on importation of honeybees from the continental United States. At paragraph 20 and following of the statement of claim they note that, with the expiry of HIPR-2004, the respondent adopted a policy of banning the importation of honey bee packages from the United States, without conducting a risk assessment.
[58] The Beekeepers identify representations made to the Canadian beekeeping industry to the effect that the respondents regulated bee imports for the purpose of protecting the beekeeping industry, that the restrictions on importation would be maintained only so long as the risk to the honeybee population existed, that the respondents would continuously monitor the situation to determine when the restrictions could be lifted. These representations were made in the RIASs which accompanied each exercise of the regulatory power. The Beekeepers do not plead that they relied on these representations.
[59] The Beekeepers also plead that the respondents’ actions were aimed at fostering and protecting the viability of the beekeeping industry, and that the respondents knew of the economic hardship suffered by certain beekeepers and beekeeping regions as a result of the restrictions on importation. In addition, the Beekeepers also plead that the respondents originally consulted and cooperated with the Canadian Honey Council, provincial beekeeping associations, individual beekeepers and other stakeholders. After 2006, the respondents consulted exclusively with the Canadian Honey Council which it knew or ought to have known was dominated by a faction which had an economic interest in maintaining the restriction on importation of honey bees.
[60] As I read the statement of claim, these are the facts pleaded by the Beekeepers which could give rise to a relationship of proximity. They plead other facts, specifically the particulars of the actions which caused them harm. It is important to recognize that an analysis of proximity based on a course of conduct cannot rest on the very conduct which is alleged to have caused damage to the plaintiff. Such an analysis would make existence of the prima facie duty of care a function of the occurrence of damage. At that point, the Anns test becomes a tautology. It is the relationship of proximity which imposes on the defendant the obligation not to do that which has caused harm to the plaintiff. As a result, the plaintiff must be able to establish proximity without reference to the acts which it claims caused it harm.
[61] It is clear from these facts that the respondents acted in their capacity as regulators and did so in consultation with the beekeeping industry. They did not assume a role outside their regulatory role, though it is alleged in the rest of the statement of claim that they discharged their regulatory responsibilities badly. This distinguishes this case from Imperial Tobacco where the relationship of proximity was found to exist by reason of the additional non-regulatory roles adopted by Canada’s officials. Imperial Tobacco is not the only template for proximity based on a course of conduct but, at the very least, it can be said that these facts do not fit that template.
[62] I have difficulty conceiving how these facts could constitute a course of conduct giving rise to a relationship of proximity. Statutory authority is given to public authorities so that they can act in the public interest. When they do so, private interests may suffer. That private loss cannot be the basis of a relationship of proximity. To find that it did would be to find that, where a relationship of proximity is not created by a statutory scheme, it can be created by actions taken to give effect to the statutory scheme. As the relationship of proximity cannot rest upon the conduct causing the harm, such a conclusion is illogical.
[63] In the same vein, one must be cautious about treating representations made in the course of exercising a regulatory power as a basis for a relationship of proximity, particularly when reliance on those representations is not pleaded. In this case, Judge found that the protection of the economic interests of the Beekeepers was not the object of the statutory scheme. I agree with that conclusion. As a result, statements made in the RIASs go no further than providing a context for the respondents’ actions.
[64] As for the question of the respondents’ relationship with the Canadian Honey Council, one presumes that the respondents dealt with this organization because it is or was the beekeeping industry’s national industry organization. It is a rare organization whose members’ interests are all perfectly aligned. There are always rump groups within and without national organizations who claim that their interests are not being properly represented. If the fact that the government chooses a national organization as its privileged interlocutor is taken to create a relationship of proximity, governments would be disinclined to consult, a trend which ought not to be encouraged.
[65] My colleague raises the issue of bad faith on the part of the respondents. The Beekeepers did not specifically plead bad faith. I do not believe that facts which they did plead lend themselves to that characterization. The Beekeepers plead that the respondents knew that the Canadian Honey Council was dominated by a faction that had an economic interest in maintaining the prohibition on importation. They also plead that the respondents at some point ceased to consult with anyone other than the Canadian Honey Council. But they do not plead that the respondents acted with a view to advancing the faction’s interests, or that they misrepresented their motives.
[66] Bad faith is generally taken to refer to deliberate conduct. I am aware of the Supreme Court’s decision in Finney v. Barreau du Québec, 2004 SCC 36, [2004] 2 S.C.R. 17 (Finney), in which the issue was whether the Barreau could rely on the immunity granted to it by statute so long as it was acting in good faith. The Supreme Court held that bad faith “must be given a broader meaning that encompasses serious carelessness or recklessness”: see Finney, at p.38-39. I would suggest that the Supreme Court decided that case on a wider ground than was necessary. The issue before it was the absence of good faith; persons who act recklessly may not be acting in good faith but they are not necessarily acting in bad faith. In any event, the Beekeepers did not plead recklessness or gross negligence.
[67] To the extent that bad faith is used to anchor a claim in negligence, it suffers from the same defect as other acts which cause harm, namely they cannot be the basis for a finding of proximity.
[68] The source of the difficulty in dealing with this claim is that while it is framed as an action in negligence, all of the particulars of negligence are acts for which a remedy is available in administrative law. Taking the pleadings at face value, the Beekeepers have been the victims of abusive administrative action. Had they sought judicial review of those abusive actions in a timely fashion, they could have limited, if not prevented, the losses of which they now seek to recover in their negligence action. This is not a case in which the Beekeepers were victims of misconduct for which there is or was no other recourse. There was a readily available remedy which they chose not to exercise. In my view, it is not just and reasonable to impose a prima facie duty of care in negligence when the injury complained of could have been limited or prevented entirely by the exercise of a readily available remedy.
[69] One could argue that the better course would be to find a duty of care but to take the availability of another remedy into account under the heading of mitigation. With respect, this reasoning is more appropriate to a case where the alternative remedy offers only a partial solution. Where, as here, a prompt application for judicial review on an expedited basis could have prevented or radically minimized the losses which are being claimed, I believe that the better policy is to require plaintiffs to exercise the rights they already have rather than finding new remedies.
[70] To the extent that this case concerns the boundary between public law and private remedies, I would say, despite my colleague’s thoughtful analysis, that the distinction is now firmly entrenched in our law. Though the sentiments expressed by Iacobucci J. in Fraser River Pile & Dredge Ltd. v. Can-Dive Services Ltd., [1999] 3 S.C.R. 108 (Fraser River) may seem quaint in light of recent developments, I believe they remain relevant and worthy of consideration:
Fraser River has also argued that to relax the doctrine of privity of contract in the circumstances of this appeal would be to introduce a significant change to the law that is better left to the legislature. As was noted in London Drugs, supra, privity of contract is an established doctrine of contract law, and should not be lightly discarded through the process of judicial decree. Wholesale abolition of the doctrine would result in complex repercussions that exceed the ability of the courts to anticipate and address. It is by now a well-established principle that courts will not undertake judicial reform of this magnitude, recognizing instead that the legislature is better placed to appreciate and accommodate the economic and policy issues involved in introducing sweeping legal reforms.
Fraser River, cited above, at paragraph 43
[71] In summary, I find that the Beekeepers have not shown that there was a relationship of proximity between them and the respondents such that a prima facie duty of care arose. That being the case, I do not need to address the second leg of the Anns test.
[72] As a result, I agree with the Judge’s disposition of the application to strike out the statement of claim.
VII. ARE THE RESPONDENTS ENTITLED TO COSTS? [73] This statement of claim in this matter relates to a proposed class action. On the authority of Pearson v. Canada, cited above, the Judge held that the respondents were entitled to costs because the action had not yet been certified as a class proceeding.
[74] It is unfortunate that this Court’s decision in Campbell v. Canada (Attorney General), 2012 FCA 45, was not brought to the Judge’s attention. In that case, this Court held that the immunity from costs provided for in Rule 334.39(1) of the Federal Courts Rule’s SOR/98-106, applied from the time the motion for certification is served on the defendants because that is the point in time at which the plaintiffs become a “party to a motion for certification of a proceeding as a class proceeding”. In this case, the motion for certification was served before the motion to strike was served or heard. As a result, the Beekeepers (i.e. the plaintiffs in the action) are entitled to the immunity from costs contemplated by Rule 334.39(1). To the extent that it might be argued that the plaintiffs lost that immunity because of the submission of their proposed amended statement of claim, it appears that the Judge misconstrued the Beekeepers’ intentions.
[75] As a result, I would allow the appeal in part and vary the judgment of the Fed